INVOICE FINANCE

Boost your cash flow and release cash tied up in unpaid invoices

Receive up to 90% of the invoice value

Funds are often accessible within 24 hours

We perform a soft credit search that won’t affect your credit rating

Tide has joined forces with Funding Options, becoming the largest credit marketplace in the UK.

Providing over £750 million in funding to more than 16,000 businesses, we’re on a mission to help business owners grow with confidence.

What is invoice finance?

Invoice financing is a funding product that allows you to use unpaid invoices as security.

By selling your unpaid invoices to an invoice finance provider, you are able to access a percentage of the money owed straight away, instead of waiting weeks or months.

Invoice financing can pay up to 90% of unpaid invoices, and the funds can be available in as little as 24 hours.

How does invoice finance work?

Invoice your clients

Issue invoices to clients as usual upon completion of work, with the usual payment terms of 30 to 90 days.

Choose invoices to sell

Once you have set up your invoice finance facility, you will need to choose one or multiple invoices to ‘sell’. The invoice financier will effectively ‘buy’ the debt that is owed by your customer.

Receive funding

The invoice finance company advances you the payment – up to 90% of the value of the invoices, sometimes within as little as 24 hours.

Customer pays the invoice

Your clients pay their invoices, usually into the invoice finance company’s account.

Receive final balance

The invoice finance company provides you with the remaining balance, minus their fees.

Types of invoice financing

There are multiple types of invoice financing that you should be aware of, to understand which type best suits your needs.

Invoice factoring

Invoice factoring is where you sell your invoices to a factoring company. This factoring company will advance you a percentage of the value, and then take over the responsibility of collecting payments from your customers.

When your customers pay the factoring company, they will deduct their fees and pay you the remaining balance.

Invoice discounting

Invoice discounting works in a similar way to invoice factoring, but you retain responsibility for the credit control process.

The lender will advance you a percentage of the balance of your invoices. Once your customers pay, you repay the loan and are charged a fee for the amount of the funds you have used, similar to how an overdraft works.

Selective invoice finance

Selective invoice finance allows you to choose specific invoices or customer accounts to sell instead of your entire ledger.

This allows you greater flexibility over the amount of credit you require, and the customers you choose to finance.

Am I eligible for invoice finance?

Being eligible for invoice finance depends on a few factors.

To get invoice financing from Tide, you must:

Be over 18

Be a UK resident

Be a sole trader, limited company or partnership

Trade Business to Business

You may also have to show account records or prove a minimum monthly revenue.

Invoice finance providers will review your business credit history, and some may check your personal credit history.

Apply for finance in 4 easy steps

Applying for invoice finance is simple. With access to over 120 lenders, Tide will find a lender tailored to your business.

Tell us how much you need to borrow We’ll ask you how much you need, what it’s for, and for some basic information about your business. If you already bank with Tide, you can apply for funding straight from the app.

Compare funding without impacting your credit score View affordable credit options that suit the unique needs of your business.

Apply in minutes Once approved, you’ll receive a quote from a lender you matched with.

Get a decision and receive your funds Funds could be available in around 24 hours depending on the type of finance.

Apply for invoice finance

Aaron MoOng Ong Buns

With the help of Tide and their team of financial advisors, I was able to navigate the complexities of business finance, and secure the necessary funds to grow my business.

Get funding today

Invoice finance pros & cons

Small business invoice financing can be a great way to free up funds for your businesses, but, as with any type of borrowing, there are pros and cons to consider.

Pros

Quick access to funds Invoice financing is fast and can be obtained in as little as 24 hours.

Improved cash flow Invoice finance can improve your business's cash flow, as it allows quick, flexible funding that scales with your business.

Reduced admin With factoring, the finance company takes on the credit control aspects of invoicing, freeing up your time to focus on your business.

Cons

Disclosure to clients With invoice factoring, your clients will know that you are using an invoice finance company, which may affect their perception of your business. Invoice discounting is a good alternative if you would prefer to keep this private.

Accountability Depending on the agreement with the lender, you could still be held accountable if your client doesn’t pay their invoice.

Invoice Finance FAQs

Is invoice finance the same as accounts receivable finance?

Yes, invoice financing and accounts receivable financing are the same, and can also be referred to as receivables financing.

‘Accounts receivable’ is a term to describe all money due to the company.

Will my customers know I am using invoice financing?

If you choose invoice factoring, the provider will manage credit control and contact your customers on your behalf to ensure timely payment.

Invoice discounting, on the other hand, is confidential and allows you to remain in control of these relationships.

What are the costs associated with invoice finance?

Invoice finance agreements will be priced based on your business and requirements, however invoice discounting and invoice factoring have different fee structures.

Invoice discounting is structured like a loan, with interest payable plus an administration fee.

Invoice factoring charges are known as a ‘factor rate’, which is based on level of risk, volume of invoices, and the time credit is extended for, amongst other factors.